THE "OTHER" ACTIVISTS THAT THREATEN THE ENTERPRISE
Normally we encounter activist investors like Paul Singer's Elliott Management Corporation, an investment management firm that operates one of the largest activist funds in the world.
Their modus operandi is about what you would expect, taking a stake in the company, sending a letter to the Board of Directors suggesting changes like divesting underperforming assets, reducing headcounts, outsourcing non-critical functions, exploring the mergers, acquisitions, and possibly the sale of the company, stock buy-backs, stock splits, debt cancelation, and The end is an increased valuation of the enterprise with the sharing of cost savings by up-streaming significant dividends to investors and seeking representation on the Board itself.
Now we are seeing another type of activist, one with political motivations damaging to the company's welfare. Actions that would eliminate profitable operations to bring about political changes, often under the guise of social, environmental, or economic justice.
Consider such a group that has taken a stake in Exxon Mobil Corp and managed to place radical political actors on its Board of Directors. It appears that this insurgent group is forcing the Board to abandon future projects to eliminate or reduce profitable operations, a prepare to leave or limit the company's participation in the fossil fuel industry..And, of course, upstream any temporary savings to investors. In essence, politicizing the company and killing the golden goose, the great source of its fortunes
As with all activist investors, the risk of adverse personnel effects is amplified and increased vigilance is warranted. Red flag words in media communications include capitalism, climate change, environmental sustainability, social awareness and responsibility, justice, equity, enlightened governance, and community stakeholders..
Change is coming. There will always be a tomorrow, no matter how much you may try to ignore it. There are no guarantees in life or promises for a bright future. Just because something bad hasn't happened yet, doesn't mean it won't. It can happen to anyone, anytime, anywhere. No one is guaranteed to wake up tomorrow and still have a job by evening. Are you now wondering, Am I Next?